Jamie Zimmerman’s Litespeed Management has gone activist on RadioShack Corporation (NYSE:RSH). According to a Schedule 13D form filed today with the SEC, the fund owns 8.87 million shares of Common Stock, same as it did by the end of the second quarter of 2014. This position accounts for 8.8% of the company’s shares outstanding, and makes of Litespeed Management the largest institutional shareholder in the company, amongst those we keep track of.
Litespeed Management is a New York-based independent investment adviser, founded by Jamie Zimmerman in 2000, and managed by her ever since. The firm focuses on special situations, distressed securities, and bankruptcies, and has averaged an 11.3% annual return between 2000 and 2012, widely outperforming the S&P 500 index. Before founding Litespeed Management, Jamie Zimmerman was the head of research for risk arbitrage situations portfolio at Toronto-Dominion Bank (USA) (NYSE:TD).
RadioShack Corporation (NYSE:RSH) is an $80.75 million market cap company engaged in the retail sale of consumer electronics goods and services through its RadioShack store chain. As we reported a few days ago, Soohyung Kim’s hedge fund, Standard General, has revealed that it is pursuing some plans to improve RadioShack Corporation (NYSE:RSH)’s liquidity situation. This announcement has helped the company regain some of the investors’ confidence, despite the weak stock price performance (the stock fell about 71.5% year-to-date, in spite of a slight recovery in late-August).
Litespeed Management went activist on the same date as the company announced the closing of definitive agreements to restructure a portion of its existing debt. The fund, along with Standard General, will provide $120 million for the company to cash collateralize letters of credit. The management said that it will seek to convert the $120 million into equity, and then restructure its Board, which will include the company’s CEO, two independent directors selected by RadioShack Corporation (NYSE:RSH), and four more nominated by Standard General.
In addition to Litespeed Management and Standard General (which owns 10.13 million shares), other major institutional investors are betting on RadioShack Corporation (NYSE:RSH). For instance, Michael Platt and William Reeves’ Bluecrest Capital Mgmt. started a position, with 2.48 million shares, over the second quarter of the year, while Israel Englander’s Millennium Management boosted its exposure astronomically, and now owns 1.21 million shares of the company.
Disclosure: Javier Hasse holds no positions in any stocks or funds mentioned
Let Warren Buffett, David Einhorn, George Soros, and David Tepper WORK FOR YOU. If you want to beat the low cost index funds by an average of 6 percentage points per year look no further than Warren Buffett’s stock picks. That’s the margin Buffett’s stock picks outperformed the market since 2008. In this free report, Insider Monkey’s market beating research team identified 7 stocks Warren Buffett and 12 other billionaires are crazy about. CLICK HERE NOW for all the details.